Peak oil – Sept 9

Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage

Rift widens between producers, consumers
Gulf Times/Reuters
High crude prices have widened the rift between consuming nations, hungry for oil now, and producers who argue they must manage their reserves for the future.
Britain used the latest technology to pump as much North Sea oil as possible and now its fields are declining at the fastest rate in the world.

At the other extreme, under-explored Libya, whose oil development was hobbled by years of international sanctions, has rising production rates and great potential.
Libya and other fellow Opec members hold most of the cards as major oil companies struggle to find new areas to operate profitably.

“A man with a mortgage has to go to work. A man without a mortgage has the choice. Opec suddenly has so much money it can make that choice,” said Chris Skrebowski of London’s Energy Institute. “The West is rapidly losing the levers to make Opec pump.”
A wave of resource nationalism, spearheaded by Venezuelan President Hugo Chavez, plays well to domestic audiences and is making resource holders focus on keeping reserves, central to their economies, for themselves and for the future. ..

“The political debate was that we need to leave some reserves for the future,” said Algerian Energy and Mines Minister Chakib Khelil, who played a key role in bringing in the hydrocarbons legislation that is being redrafted.
Pessimists about the future of the world’s energy reserves say producers like Britain were rash not to take a similar line.
“Britain is the most appalling example of how not to manage a finite reservoir,” said Colin Campbell, a retired exploration geologist, who is one of the prime advocates of the peak oil theory world oil output is at or near its highest level.
“We not only got rid of it, but we got rid of it at rock-bottom price.”
(7 Sept 2006)
Read on to hear David Fyfe of the IEA explain, “allowing big oil firms to work reserves such as those held by Opec could ensure supplies for the future, rather than deplete them.”

Armageddon on the couch (PeakOilBlues)
Andrew Leonard, Salon
As if there weren’t enough puzzling problems in the world to worry about, now wrap your mind around this vexing question. Suppose you are a psychotherapist who believes that the age of peak oil, along with a concurrent global economic collapse, is imminent, or already upon us. What do you do when your patient starts agonizing over his desire to buy a new sports car, without ever once considering the question of fuel economy? Do you even mention the contributions of automobile travel to the challenge of an energy-constrained future? Do you try to hint, ever so gently, that people like him are destroying the planet? Or would bringing up the topic of peak oil be a ghastly therapeutic no-no? Because, after all, that’s just what someone in counseling needs to think about: the prospect of a disaster so great as to make individual action seem meaningless. It’s kind of depressing.

If this conundrum interests you, you might find the Web site/blog PeakOilBlues to your tastes. Created by Kathy McMahon, a Massachusetts psychologist, the site is designed for people who are having trouble coming to grips with peak oil Armageddon. It’s one thing to believe that cheap oil is running out, and understand that you’re going to have to change your way of life. But what if, as the site quotes one person saying, you look at a future in which everyone must raise their own chickens and think, plaintively, “I don’t want to be a farmer.”

…My own preference, when facing such existential angst, is to go for a ride on my bike, which I’m still convinced will help prevent global warming and save on fossil fuels, despite some arguments to the contrary. Not only does a good ride up a hill keep despair at arm’s length, but it is also, depending on how expensive your bike is, a lot cheaper than seeing a psychotherapist.

But, hey, talking over your fears and anxieties with someone reasonably intelligent has its advantages, too. As long as they keep their own dystopian anxieties off the table.
(5 Sept 2006)

Australians guzzle oil while supplies dwindle
Annie Guest, The World Today (ABC)
…ANNIE GUEST: Whether 2006’s higher petrol prices have pushed more Australians to walk, cycle or catch public transport remains to be seen.

They should be, according to a Parliamentary inquiry whose participants include Liberal Senator Bill Heffernan and two other Coalition members.

In their interim report tabled today, they urge the Federal Government to plan for imminent declining oil supply.

CHRISTINE MILNE: Australia should be planning for peak oil before 2030.

There is overwhelming evidence that the world is running out of oil and certainly the age of cheap, plentiful, easily accessible oil is over.

ANNIE GUEST: The Australian Greens chaired the inquiry into Australia’s oil supply and alternative fuels. One of their representatives, Senator Christine Milne says all members agreed Sweden sets a good example.

CHRISTINE MILNE: Sweden has moved to end its oil dependency by 2020. Australia needs a plan to reduce its dependency on oil.

ANNIE GUEST: The Committee was told significant sections of society have limited capacity to cope with sustained oil prices, and it’s contributing to more people losing their homes to bank repossessions.

The report says gas will become Australia’s major fuel after oil, and the Government should be encouraging gas infrastructure now.

It recommends significantly increasing the 2010 target of less than one per cent of transport biofuels and found energy challenges must be solved while reducing greenhouse gas emissions.
(8 Sept 2006)

Oil supply and demand recent trends
Jerome a Paris, European Tribune
There has been a slew of oil/peak oil diaries recently. I’d like to recommend in particular HiD‘s long comment on how the oil markets work, and provide some additional numbers on oil production and supply, via Matt Simmons and the Energy Bulletin (another excellent source of information on the energy sector and peak oil issues).

…The lessons from all this:

* the 90s have seen lower energy prices than would have been expected thanks to the collapse of Soviet Union demand. That collapse has hidden the underlying trend in oil demand increase for a long time;

* demand is growing significantly in China, the USA, but also within the oil producing countries. Thus volumes available for export on the world markets are much less than production increases. This is especially true in the last few years, where demand has accelerated in a number of countries like Saudi Arabia, Iran and Russia.

* with many non-OPEC countries going into decline, their export capacity will plummet extremely rapidly as their consumption (still covered by domestic production) keeps on growing.

* Matt Simmons concludes that it is extremely unlikely that the few countries that have the ability to significantly increase their production will be able to cover both the increase in overall demand form imorting countries and the drop in exports from other producers.

I’d like to particularly flag the numbers for Canada. Its significant production growth has been to a large extent “neutralised” by its own rapidly growing demand, making its net exports grwo only by less than 200,000 b/d over the period, i.e. 1% of US demand…
(7 Sept 2006)
Another version of the article is at Daily Kos.

Cornucopians – A Guide for the Perplexed
Dave Cohen, The Oil Drum
The Oil Drum continually attracts new readers interested in what those concerned about peak oil are saying. This story is mostly for them but also may serve as an amusing review for veteran contributors or readers. It is always a good idea to get back to basics. First time posters are welcome.

Part 1 defines Cornucopian Fallacies and gives a mainstream view from PFC Energy by way of contrasting such extreme views with a moderate voice in the center.

Part 2 presents a taxonomy of some present day Cornucopians who believe that there are no limits to growth. Bear in mind that those concerned about peak oil are sometimes labelled with a broad brush as Cassandras predicting eschatological doom. All of us fit somewhere on this scale.

This post does not deal with some optimists in the energy business like Amory Lovins, CERA, Michael Lynch and CGES who deserve a more extended treatment. That will be the subject of another story.
(2 Sept 2006)
Serious stuff with a light touch. If you haven’t looked at The Oil Drum lately, check it out. They have a slew of good posts, with several on the biofuels debate. -BA